© Reuters
Goldman Sachs (NYSE 🙂 expects Fed rates to peak 5% in March – Bloomberg News
Investing.com – The US Federal Reserve could raise rates to 5% by March 2023, economists at Goldman Sachs Group said, 25 basis points higher than previously forecast, Bloomberg News reported on Sunday.
Goldman Sachs CEO David Solomon also said last week that the US Federal Reserve could raise interest rates by more than 4.5-4.75% if it doesn’t see “real changes in behavior.”
The upcoming Federal Reserve meeting could shed some light on how long it will stick to tight monetary policies.
The report added that Goldman Sachs economists added that the journey to a 5% hike includes hikes of 75 basis points this week, 50 basis points in December and 25 basis points in February and March.
The report said Goldman cited three reasons for expecting a Fed hike beyond February: “uncomfortably high” inflation, the need to cool the economy when the fiscal squeeze ends and price-adjusted incomes rise, and to avoid premature easing. financial conditions.
The central bank is expected to raise interest rates by 75 basis points for the fourth consecutive time at the end of its next policy meeting on November 1-2.
Betting on a less aggressive Fed this year was a dangerous undertaking. Stocks repeatedly rebounded from lows on expectations of the Fed’s so-called pivot, but were again squeezed by new evidence of persistent inflation or by the central bank’s intention to maintain the pace of interest rate hikes.
